Thursday, May 18, 2006

Stock Downgraded: YHI Int downgraded to "hold" by CIMB-GK

CIMB-GK Research said it has downgraded its rating for YHI International Ltd to "hold" from "outperform" and cut its target price for the tires and alloy wheels distributor to 0.46 sgd. Lower profit assumptions for YHI's manufacturing division prompted CIMB-GK to scale back its 2006 earnings forecast for the company. "YHI's latest results show that while sales were on track, margins were lower than expected in the manufacturing division because of rising raw material costs," it said in a note. The company reported a slight fall in first quarter net profit to 5.11 mln sgd from 5.13 mln the year earlier. "With aluminium prices surging 30-40 pct in May, we believe that second quarter earnings could come in weak again. At 11.15 am, YHI was down 0.010 sgd or 2.33 pct at 0.420 on volume of 236, 000 shares.

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